The impacts of M&A on the futures market : evidence from North American commodities markets

Abstract

This paper researches the correlation between mergers and acquisitions (M&A) and their impact on the futures prices of gold, silver crude oil and natural gas in the following period. I concentrate on the activities that cause the price of these commodities to change in order to find out how M&A affects the prices; whether their correlation is positively or negatively correlated and by how much does the correlation exist. This paper used the event study analysis method to undertake the test. The presented work is based on 2,405 samples of M&A in North America in four different areas of futures and the sample of the last price available from the historical (2009-2014) futures price and the M&A announcement payment on the corresponding date since we assume the existence of EMH. The final result indicated that there is a positive relationship between the announcement value of M&A and futures prices, meaning that M&A could create a short-term wealth.